Categories
Featured Tax and Budget

State Budget Clears Legislature

The $31.5 billion spending package is about $400 million less than last year’s. It includes a 2.5 percent pay raise for state employees and accounts for cutting the tax on food to 5.5 percent from 5.25 percent, with expectations of dropping it further during Gov. Bill Haslam’s tenure. The plan also phases out the tax on inheriting estates over four years.

Tennessee lawmakers not only approved a budget filled with “pork barrel projects” they once said were too local, but they also agreed to spend $500,000 of taxpayer dollars on a museum in Virginia.

The GOP-run Tennessee Legislature put its stamp of approval on a $31.5 billion budget Monday after days of wrangling over about $25 million in localized spending. All but a half-dozen of those projects made it into the budget that now heads to the governor.

Republicans pointed out, though, that this year’s budget is in total a reduction over those of recent years.

“Tonight the General Assembly passed a balanced budget which cuts spending, makes government smaller and provides tax relief to every Tennessean,” said Lt. Gov. Ron Ramsey, R-Bristol. “Republicans have proved once again that it matters who governs.”

The budget package, which passed the House Monday on a 64-28 vote and 31-2 in the Senate, includes $50 million in tax cuts.

The total budget is now about $400 million less than last year’s. The spending plan includes a 2.5 percent pay raise for state employees and accounts for cutting the tax on food to 5.5 percent from 5.25 percent, with expectations of dropping it further during Gov. Bill Haslam’s tenure. The plan also phases out the tax on inheriting estates over four years.

“Republicans understand that when a surplus of money comes in, we should return it to its rightful owners: the taxpayers,” House Speaker Beth Harwell, R-Nashville, said in a statement.

The budget, HB3835, also calls for the controversial closing of the Taft Youth Center in Bledsoe County and spends about $560 million on building improvements and construction.

The current year’s budget is expected to top off at about $31.9 billion, which includes both state and federal spending.

Passage of the budget got temporarily tied up last week after members of the House rejected about $1.8 million in local spending projects on the basis that they lacked significant statewide or regional impact. In retaliation, the Senate cut $22 million in “local projects” it said the House overlooked. The two chambers then came together Friday night and agreed to add all but six projects back in.

The chambers also included $600,000 in one-time money for the Tennessee Arts Commission to dole out grants for musical heritage. One such grant, to total $500,000, would go toward the “Birthplace of Country Music” museum in Bristol, Va., across the state line from the lieutenant governor’s district.

Democrats in the House spent close to an hour heaping derision on the idea of spending taxpayer funds on a nonessential project that isn’t even technically inside the borders of the state of Tennessee.

“I think at a time that we are in this budget cutting the higher education budget by two percent, cutting University of Tennessee’s budget by seven percent, to just name a couple cuts, we should not be giving money to build buildings in the state of Virginia,” argued Rep. Mike Stewart, D-Nashville. “I think the Tennessee Legislature should focus on giving money to buildings in the state of Tennessee.”

Republicans defended the earmark as passionately as Democrats denounced it.

“When you spend money on tourism it’s a proven fact that every dollar you spend will get you $13 in return. And sometimes, it’s even more than that,” said Rep. Richard Montgomery, R-Sevierville. “You’ve got a very unusual situation in Bristol, Va., and Tennessee. It’s extremely unusual. You’ve got a line right down the middle of a road of a city. On one side of that line is Tennessee, on the other side of that line is Virginia.”

“You figure a half a million dollars that Tennessee spends on that museum, and you walk across the street and stay in the motels, eat at the restaurants and spend all the money you can over in Tennessee when you’re there visiting that area. And you’re getting 13 to one — and even better than that sometimes — on the money? That is a great investment,” Montgomery said.

House GOP Leader Gerald McCormick said it isn’t at all unusual for the state to spend money elsewhere.

“Would it be objectionable for the state of Tennessee to spend money to take care of memorials to our dead soldiers in France, from World War II, that died storming the sands of Normandy?” said the  Republican from Chattanooga, himself a Gulf War veteran. “That’s what we’re doing right now. So I’d say it’s probably legal if we’re going across state lines.”

Several Democrats questioned the relevance and tact of that particular analogy, comparing government funding for a music museum with memorials to American war dead.

“There are no soldiers buried on this site, so we should not have to worry about maintaining it for that reason,” said House Democratic Caucus Chairman Mike Turner, D-Nashville.

Memphis Democrat Jeanne Richardson suggested McCormick’s example was unbefitting.

“As much as I like country music, there’s no comparison to building a country music museum in another state, and memorializing those people that fought for our country, and I think you make it petty when you make those kind of comparisons,” she said.

Democrats, overwhelmingly outnumbered in both chambers, complained that the budget ignores $107 million in excess revenue this year, which they expect to grow. They argue that money could be used to restore programs, offer more in the way of college scholarships or further reduce the food tax.

GOP leaders and members of Haslam’s administration argue spending that money would be shortsighted as drug-prescription costs increase and the state prepares to implement provisions of the Patient Protection and Affordable Care Act. Two things could change that dynamic: the Supreme Court’s expected ruling in June on a challenge to the health care law and the outcome of the presidential election.

“The money will go into just a regular savings account, CD account, and that money will be saved until we come back, and it will be at our disposal next year, come January,” said House Finance Committee Chairman Charles Sargent, R-Franklin.

The budget document will next head to the governor’s desk.

Leave a Reply

Your email address will not be published. Required fields are marked *